chapter 7 question 17

A client in the 34 percent marginal tax bracket is comparing a municipal bond that offers a 6.00 percent yield to maturity and a similar-risk corporate bond that offers a 7.20 percent yield.

Determine the equivalent taxable yield. (Round your answer to 2 decimal places.)

Equivalent taxable yield

%

Which bond will give the client more profit after taxes?

	Municipal bond
	Corporate bond